Growing customers organically

Continual changes in customer demographics for nearly all kinds of businesses in areas from race to income to mobility & educational attainment makes customer rentention seem like an unachieveable and unworthwhile goal. For businesses such as hotels in a major international gateway cities that have a high proportion of one-time customers turning them into repeats often looks like an exercise in futility.  A broad spectrum marketing cum advertising approach that necessarily treats all customers equally is almost certain to result in wasteful spending and revenue degradation as repeats who will take advantage of rebates and discounts and return to the service or product on offer. While there are several models using sophisticated means such as machine learning and predictive analysis to identify who are the One-time/First-time customers worthy of scarce ad/marketing dollars the smart bet remains on organic retention of customers. 

In that genre, a new book (Beyond the Familiar: Long-Term Growth through Customer Focus and Innovation" by Patrick Barwise and Sean Meehan) on the market offers insights how companies that have a clear, relevant  promise, obsessively deliver that message day-in, day-out. These companies consistently meet customer needs better than their competition  and are thus able to generate market-leading organic growth that is both sustainable and profitable.  In reviewing the book The Financial Times notes that " It would be surprising if this book were surprising. A dramatic leap of topic or treatment would contradict the authors’ central message that the heroic strategic shifts, breakthrough products and transformational acquisitions that are the stuff of business legend offer a perilous path to success."

The path to sustained organic growth according to the authors lie in adhering to five key principles that include a relevant customer promise, building customer trust by reliably delivering that promise, continuously improving that promise while still reliably delivering it, driving the market by innovating beyond the familiar and finally supporting the foregoing via an open organization that promotes frank discussion based on clear facts and market feedback.

Implicit in the notion of organic growth is listening to customers and learning from them to select the the most optimal opportunities for growth from within. That includes converting one-time interactions  into productive and profitable relationships.  The authors of Beyond the Familiar note that doing so requires attributes and characteristics among business leaders that include fearlessness and extreme persistence and cite the example of how electronics giant Philips reoriented its product line around the idea of Sense and Simplicity.  Philips went about relentlessly improving its promise to customers, its communication with staff and its commitment to quality in its quest for organic growth and incremental innovation. The same holds true for oft-cited Apple, labeled as a "fast-follower" with tremendous incremental innovation rather than its more common perception as an innovator of cutting edge products.  Other ingredients of organic growth stressed are attention to customer dissatisfaction more than satisfaction and a baseline of reliability over the addition of unique features and services. But perhaps among the most important elements of organic growth whether for products or services is having the right information and insights on what customers best exemplified in the real world by Starbucks. Recent contretemps notwithstanding its growth from small coffee-bean equipment company to the world's largest coffee empire makes it the exemplar for organic growth.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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